Dr B K Mukhopadhyay
(The author is a Professor of
Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted
at m.bibhas@gmail.com)
Dr. Boidurjo Rick Mukhopadhyay
(The author, international award-winning development and
management economist, formerly
a Gold Medalist in Economics at Gauhati University)
Data from the last decade illustrates that Indian agriculture has grown to be more robust with record production of food grains and oilseeds, and pretty consistently so. There has been increased procurement, consequently adding vast stocks of food grains in the granaries. India remains one of the world's top producers of rice, wheat, milk, fruits, and vegetables. At the same time, however, India houses a quarter of all undernourished people in the world. Since almost half the total expenditure of about half the households are on food, increasing the efficiency of the farm-to-fork value chain is crucial for eliminating poverty and malnutrition. With new targets set and initiatives implemented, policymakers also need to take stock of reality before progressing with next level ambitions for the farm sector.
By a considerable measure, most developing and emerging countries have not significantly relied on agriculture for export expansion and growth. Yet, the boom in agriculture has clearly shown a disproportionate effect on poverty as more than half of the population in developing countries reside in rural areas, and poverty levels are much higher in rural areas than in urban areas. Middle-Income Countries are home to 75% of the world's population and 62% of the world's poor. On the other hand, LDCs account for 14% of the world's population while they comprise more than 50% of the world's extremely poor (living on less than $1.9 a day).
It is estimated that as much as one-fifth of the total agricultural output is lost due to inefficiencies in harvesting, transport, and storage of government-subsidized crops. In India, agriculture accounts for as much as around one-fifth of the economy while employing an estimated 60 per cent of the labour force. Still, it is considered highly inefficient at various levels and incapable of solving the hunger and malnutrition problems.
Although the yield per hectare of food grains has shown some improvements in recent years it is not significant enough to cater to the needs of the rising population particularly when income levels are also rising. There still remains an urgent need to focus on research as well as better agricultural practices to ensure that productivity levels are increased in the shortest time possible. Special attention may be required for States with relatively low productivity.
Data shows that that the production and productivity of pulses and oilseeds are of growing concern. A sizeable proportion of these items is met through imports. The scope for import of pulses is limited due to the limited number of countries producing it. Due to this supply-demand gap, domestic prices fluctuate with availability and prices in the international market apart from domestic production trends.
Smart horticulture saves the day
The quality of many horticultural crops enables India to remain largely unbeatable in the global market. Despite the reality, that competition has remained pretty intense – getting hotter every minute – we can retain the markets for many agri-commodities. The flip side – we have to remain content with less than 1 per cent share in global trade in agri-commodities! As the data would otherwise suggest, had we been one of the grain bowls by now, we could have reaped enormous benefits from the rising international prices of the agri-commodities. The most important factor on this score is that demand for such commodities – especially the food grains – is unlikely to come down; rather, it is all set to go up over time. Population upsurge coupled with growing demand from industrial sectors could keep the demand factor reasonably high.The Dongbei region of China has managed to do this for decades now.
Managing risks
A comprehensive set of efforts, including multi-stakeholder involvement, is required for farm development. Once again, infrastructure holds the key. The loss incurred during the entire production process, including the damage done in the unscientific threshing, rat menace, and field loss can be minimised. Without proper training imparted to the farmers regarding post-harvest technology, not much can be expected on this score.
Connectivity between the producing zone and the selling zones calls for immediate reinforcement. Buy-back arrangement is a good process provided the actual producer receives the (agreed) legitimate benefit in due course. In addition, scientific planning regarding groundwater exploration is critical as indiscriminate usage leads to consequent medium- and long-term problems. More efficient surface water utilization could be investigated using emerging technologies made available.
Agriculture and economic growth
Policy attention has long focused on agriculture's traditional role to provide food, create jobs, earn export income, generate savings and funds for investment, as well as produce primary commodities for expanding industries. However, it could be argued that the assessment should be more comprehensive: the role of agriculture often goes beyond these direct, market-mediated contributions. Agriculture also plays an important role in providing indirect non-commodity contributions that are public goods, social service benefits and environmental services not captured by markets. This sector today, thus, contributes to (A) Environmental services such as soil conservation, watershed services, biodiversity, and carbon sequestration; (B) Poverty reduction; (C) Food security; (D) Agriculture as a social safety net or buffer in times of crisis, and (E) Social viability.
The case of North-east India
There lies an immense scope for improving the agri-scenario in the NE region. Despite the potentialities that are high, a number of inhibiting factors have continued to check the agri sector in this region to reach its full potential over the years. Though there exists overwhelming dependence on agriculture, yet the system of farming has not made many departures from what it was decades back. The modern system of farming is still in the developing stages in regions like Meghalaya. So also, is the plight of productivity. This sort of huge deficit naturally causes much concern over the decades.
Little availability of land, non-availability of suitable paddy varieties in high and mid-latitude regions has been a reality no doubt, but the gap, otherwise, could have been covered through other related efforts – horticulture, the prospect of the sector being at very high indeed.
More area still now can be brought under the horticultural and plantation activities considering the prevailing agro-climatic factors in the region. Some years ago, Assam occupied the first position in the country in the implementation of the National Food Security Mission (NFSM).
Implementing the knowns
The consistent decline in the share of private-sector investment in the agriculture sector is a matter of concern. This trend needs to be reversed through the creation of a favourable policy environment and availability of credit at reasonable rates on time for the private sector to invest in agriculture.
There has been a substantial increase in MSPs of various crops over the last few years, which is necessary to incentivize farmers to increase production and productivity. At the same time, the MSP signals the floor price for the product, which has the potential to increase the prices. Addressing the welfare of agricultural producers and consumers simultaneously poses a challenge. Further, the inability of a large number of small and marginal farmers to directly access the agri-market puts a question mark on increases in MSP actually benefiting such farmers.
Finally, climatic factors must not be lost sight of as well. The high risk for water-related yield loss in rain-fed agriculture makes farmers avert risk, which influences their perceptions on investments in other production factors such as labour, improved seed, and fertilizers. Because of the risk associated with climate variability, smallholder farmers are generally and rationally keen to start by reducing the risk of crop failure due to dry spells and drought before considering investments in soil fertility, improved crop varieties and other yield-enhancing inputs. These, in turn, together with the fluctuations in yields, makes it hard for resource-poor men and women in semi-arid areas to respond effectively to opportunities made possible by emerging markets, trade and globalisation. Rainfall micro-insurance, on this score, can increase agricultural production. A systematic strategy and the ability to read the right signals can boost the nature and promise of progress.
As we turn another year on the calendar, it is essential to revisit and address the challenges of the agriculture sector through both comprehensive and coordinated efforts. Renewed attention needs to be paid to improving farm production and productivity, better utilization of agricultural inputs, proper marketing infrastructure and support, stepping up investment in agriculture with due emphasis on environmental concerns and efficient food management.